ecn 104 week 4

supply and demand

what happens in a perfectly competitive market?

1. sellers sell an IDENTICAL good/service 👬

2. any individual buyer/seller ISNT powerful enough on his own to affect the market price of that good/service

DEMAND CURVE 🤑 🔢 😡

plots rs bw market PRICE and QUANTITY of a good demanded by BUYERS

SUPPLY CURVE 🤑 🔢 🕴

plots rs bw PRICE and QUANTIY of a good supplied by SELLERS

the competitive equilibrium price equates the ?

quantity DEMANDED and quantity SUPPLIED

when prices are NOT free to flunctuate, markets fail to?

equate quantity demanded and quantity supplied

**This statement means that when prices are not allowed to adjust freely (due to regulations, price controls, or other restrictions), the balance between the quantity of a good or service that people want to buy (quantity demanded) and the amount that sellers are willing to provide (quantity supplied) is disrupted.

MARKET

group of economic agents who r trading a good/service + rules for trading

MARKET PRICE

price at which buyers and sellers conduct TRANSACTIONS

in a perfectly competitive market?

there are many IDENTICAL sells and LOTS of buyers; every buyer PAYS and every seller CHARGES same market price

no buyer or seller is big enough to?

INFLUENCE market price

3 ways buyers behave? 📆

1. quantity demanded

2. demand SCHEDULE

3. demand CURVE

QUANTITY DEMANDED 👌

amount of good buyers are WILLING to purchase at given price

DEMAND SCHEDULE 📆

a TABLE reporting quantity demanded at diff prices holding all else EQUAL

DEMAND CURVE 💹

PLOTS quantity demanded at DIFF prices

why some ppl more willing to pay extra on gas? 💰

some ppl have higher incomes

MARKET DEMAND CURVE ➕

SUM of individual demand curves of ALL potential buyers

market demand curve plots the rs bw?

total QUANTITY demanded and market price; all else equal

LAW OF DEMAND

almost all cases, quantity demanded RISES when price FALLS; holding all else equal

SHIFTS of demand curve occurs when 1 of following CHANGES (5) 😋

1. tastes and preferences

2. income and wealth

3. availability and prices of related goods

4. number of buyers

5. buyers expectations ab future

demand curve shows rs bw?

PRICE and QUANITY